Okay, I just found the following explanation in the online Apple forum:
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I would use iMovie 06 with iDVD 09/11, why?
iMovie 09/11 uses 'single field processing' meaning every other horizontal line of the video is thrown out, which reduces the sharpness of the footage. iMovie 06 uses ALL of the image to form the video.
If your primary workflow is editing DV clips and making DVDs, iMovie '06 is better suited. Your movie will arrive at iDVD in DV format, which is an ideal match for making a DVD: same resolution, same pixels aspect ratio, and original quality. If you share your movie from iMovie 09/11, it gets re-rendered at 640x480 or less, and then iDVD upscales it back to 720x480. The end result is obviously not as good.
iMovie 06 and iDVD 09/11 is a "lossless" combination. My movies are diamond sharp, with the same quality you get from Hollywood.
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This explanation is good enough for me.
I've been wondering why my DVDs don't look as crisp as I would like. I thought perhaps it was due to also seeing my Blu-rays of the same projects. Of course, SD will always look "not as good" in comparison. But the above is a compelling argument that my DVD's _could_ look better.
Now I'm mad that I've distributed lots of DVDs that could have been sharper. Should I go back and redo them all??? Yeah, another project for the back burner, like "scan all my old family photographs," "transfer all my old DAT masters," and "digitally archive my 1,500 Yes cassettes."